Does crypto follow the stock market?

Crypto and the stock market often move together, but crypto does not simply follow stocks. Since 2020, bitcoin has tended to rise and fall on the same days as major US indexes, and that connection is strongest when markets are under stress. In calm periods the link can weaken a lot.

Does bitcoin follow the stock market?

Not always. CME Group research by economist Mark Shore measured the correlation of daily returns between bitcoin and the S&P 500. Correlation runs from -1 (opposite moves) to 1 (identical direction). For 2017 to 2019 it was about 0.01, essentially no link. For 2020 to 2022 it rose to about 0.40, and for 2023 to April 2025 it was about 0.30.

The IMF found a similar jump, from 0.01 in 2017 to 2019 to 0.36 in 2020 and 2021. A reading of 0.3 or 0.4 means the two often move the same way, but far from always. Bitcoin also swings much harder, with daily moves roughly three to five times larger than stocks, according to CME.

What happens to crypto if the stock market crashes?

History suggests crypto has often fallen too. CME's figures show the correlation climbing to 0.56 during the COVID-19 sell-off in February and March 2020, and to 0.69 between November 2021 and December 2022, when the war in Ukraine and Federal Reserve rate hikes hit markets.

One reason is liquidity. When investors need cash during a sell-off, they may sell whatever they can, including bitcoin, which trades all day every day (see does crypto trade 24/7). That is a pattern from the past, not a rule for the future.

Why do crypto and stocks move together?

Researchers give several overlapping reasons:

• Shared investors. As institutions entered crypto, more of it sits in the same portfolios as stocks, so the same decisions move both.
• Risk appetite. An IMF working paper found that tighter US monetary policy pushes crypto down through the same risk-taking channel that affects stocks.
• Easier access. ETFs, futures and options let traders adjust crypto exposure alongside other holdings.

CME stresses that correlation does not prove one market causes the other. Both may be reacting to the same news.

What does the bitcoin vs S&P 500 correlation tell you?

It tells you how closely their daily moves have lined up over a past period. CME found a 60-day rolling correlation that ranged from about -0.2 to 0.2 before 2020 and has mostly been positive since. The IMF also warned that closer links mean shocks can spread between crypto and stock markets in both directions.

For more context, see crypto vs stocks, why crypto is so volatile and how interest rates affect crypto.